In the main, an escrow is a third party to a transaction between a seller and a buyer (the buyer and seller are collectively referred to as the “principals”). A deed, a bond, money, a piece of property, or other valuable, is delivered to the third party—hereinafter referred to as the “escrow officer”—to be delivered by the officer to the grantee only upon the fulfillment of all the conditions precedent which are imposed upon the principals and are usually of the express terms and conditions of a purchase and sale agreement (also referred to more simply as the “sales contract” hereinafter). In essence, the property is placed in trust in an escrow account.
Escrow transactions can be for both personal and real property. Some states (e.g. California) provide for the use of licensed escrow agents when a sale of real estate is being transacted. For the purpose of describing the present invention, an exemplary escrow transaction for real estate is considered; no limitation on the scope of the invention is intended by the inventor nor should any be implied therefrom.
While computers are important tools for the buyers and sellers of a valuable property jointly referred to as the “principals”), in the main, the use of actual purchase agreements, escrow services and associated contracts, such as loan agreements, are handled manually since the true identity of the principals and their agreement by signature on the assorted contracts and documents involved is a critical, personal factor. Notarization on the more important documents is often required. The coordination of the various entities involved with the transfer of a real estate property—namely the principals, agents, real estate brokers, attorneys, lending institutions such as banks or other mortgage related institutions, insurance companies, government and quasi-governmental entities (such as county clerk offices, local real estate boards, state deed recording and tax departments, and the like), vendors (e.g., title companies, property inspectors, property assessors, home owners associations, and the like), and any and all other entities involved in the transaction to be escrowed, is assigned to a licensed escrow agent. In turn, the escrow agent usually must involve the aid of administrative assistants to track all of the required paperwork and transfer of funds necessary to complete the transaction. As can be imagined, the number of such real estate transactions in a single California county on a daily basis is enormous. Moreover, commercial realty transactions involve even more complex service involving even more service providers.
With the advent of the so-called computer age, lending institution have devised methods and apparatus for processing mortgages and other loans. Mortgages and other transactions involving banks and credit-loan associations have been the subject of computerization for many years. See, e.g., U.S. Pat. No.:    U.S. Pat. No. 4,876,648, SYSTEM AND METHOD FOR IMPLEMENTING AND ADMINISTERING A MORTGAGE PLAN;    U.S. Pat. No. 5,924,084, NEGOTIATED MATCHING SYSTEM;    U.S. Pat. No. 5,930,776, LENDER DIRECT CREDIT EVALUATION AND LOAN PROCESSING SYSTEM;    U.S. Pat. No. 5,940,811, CLOSED LOOP FINANCIAL TRANSACTION METHOD AND APPARATUS;    U.S. Pat. No. 5,983,206, COMPUTER SYSTEM AND COMPUTER-IMPLEMENTED PROCESS FOR IMPLEMENTING A MORTGAGE PARTNERSHIP;    U.S. Pat. No. 5,966,699, SYSTEM AND METHOD FOR CONDUCTING LOAN AUCTION OVER COMPUTER NETWORK;    U.S. Pat. No. 5,991,745, REVERSE MORTGAGE LOAN CALCULATION SYSTEM AND PROCESS;    U.S. Pat. No. 5,995,947, INTERACTIVE MORTGAGE AND LOAN INFORMATION AND REAL-TIME TRADING SYSTEM;    U.S. Pat. No. 6,012,047, REVERSE MORTGAGE PROCESSING SYSTEM;    U.S. Pat. No. 6,016,482, ENHANCED COLLATERALIZED FUNDING PROCESSOR; and    U.S. Pat. No. 6,029,149, LENDER DIRECT CREDIT EVALUATION AND LOAN PROCESSING SYSTEM.
Buyers are often “pre-qualified” by a lending institution for a particular loan amount even before seeking the right property. As a result, one of the problems of the marketplace is that the cause of delays experienced in valuable property exchange escrow transactions have shifted from the lending institution to the escrow agent. In some states, e.g., California, real estate transactions are regularly conducted via an escrow.
With the establishment of the internet, the world wide web, and the like, the emergence of e-commerce has generated a need for a computerized method and apparatus for processing escrow transactions and a method of managing escrows using such tools.